Listing shares on the NYSE may sound a bit like an initial public offering. Today’s news is only half way there for a small gold mining capital financing player which has been public in Canada, but investors will probably want to pay special attention to the founders’ background before starting this company. Vancouver-based Sandstorm Gold Ltd. (NYSEMKT: SAND) had its executive officers ring the opening bell at the NYSE today as the Canadian company listed its shares on the New York Stock Exchange.
This was listed as a junior player before today. The reason that investors may tend to care more about this situation is that its President and Chief Executive Officer Nolan Watson was the CFO of Silver Wheaton (NYSE: SLW) prior to joining Sandstorm, which means he was the head of one of the top mining plays which investors flock to for silver. The company’s press release noted that he “helped raise over $1 billion in debt and equity to fund Silver Wheaton’s growth to a $5 billion market capitalization in less than 5 years.”
Sandstorm Gold is a gold streaming and gold royalty company which offers upfront financing for gold mining companies seeking capital. For the capital infusion, Sandstorm generally receives a gold streaming agreement with a right to purchase a percentage of the life of mine gold produced at a fixed price. The company also notes upfront in its own description that it is a non-operating gold mining company with a portfolio of seven gold streams. Of those streams, five of are producing gold and there are three royalties.
The company has been listed in Canada since 2008 and shares have more than tripled since its launch. Its website even noted, “Sandstorm was founded by Nolan Watson and David Awram who, prior to Sandstorm, were the first two employees of Silver Wheaton.”
A featured example of a deal was with Metanor Resources, which is listed under the “MTO” stock ticker in Canada. Sandstorm provided $20 million (U.S. dollars) to Metanor as an upfront cash payment in exchange for a gold streaming agreement to purchase 20% of the life of mine gold produced from Bachelor Lake at $500.00 (U.S. Dollars) per ounce of gold.
JON C. OGG